The U.S. Supreme Court appears to be making June 21 its annual tax opinion day. Or, at least, they’ve issued the major tax opinion of the term on June 21 for the past two years. While last year’s issue related to sales taxes (Wayfair), this year the issue is whether a state can tax a trust solely based on the trust having a resident current income beneficiary, even if that beneficiary has no right to force a current distribution of such income, no such distribution is made, and there’ s no guarantee the beneficiary will ever receive such a distribution.
A unanimous Supreme Court decided that the answer is no, a state cannot impose its tax in that situation, in the case of North Carolina Department of Revenue v. The Kimberly Rice Kaestner 1992 Family Trust, United States Supreme Court, Case No. 18-457. Justice Sotomayor wrote the main opinion on behalf of the Court.Read More